The operational strategy proven to be most effective in achieving world-class performance levels is Lean. Unfortunately, accounting can be a major obstacle to an effective Lean conversion.

Accounting must become a major contributor and participant in the Lean journey. Accountants typically do not understand Lean, have not been taught how to support Lean, do not know how to measure Lean improvements, do not have time to devote to it, and generally have not been asked to participate in Lean activities that usually focus exclusively on the shop floor.

On the other hand, operations’ professionals typically achieve great gains on the production floor but are surprised that their efforts are met with a yawn in accounting with little to no evidence of improved operating results. Since accounting has its own language that is somewhat foreign to the rest of the company, a significant disconnect develops between the functions. Furthermore, typical accounting metrics promote non-Lean behavior creating a potential obstacle to a successful Lean journey.

Manufacturing must understand why their successful efforts at improving flow, reducing inventory, improving customer service and creating capacity will potentially lower earnings. Manufacturing must be able to explain this, in advance, so accounting is not surprised when quarterly results are prepared. As long as operational improvements remain invisible on financial reports, accounting will be stymied in supporting operational improvements and manufacturing will be frustrated in knowing their efforts are not appreciated.

It is imperative that manufacturing and accounting work together to develop new metrics and “plain English” financial reporting. This session will illustrate the disconnect between accounting and operations and what needs to be done to eliminate it.

Learning Objectives:

“In this session you will learn…”

Why shop floor improvements will likely be invisible to accounting

Why current metrics will not illustrate Lean improvements

What manufacturing practitioners can do to create an alliance with accounting

Why your company’s cost system likely promotes non-Lean behavior

About the Facilitator:

Jerry has over 35 years of experience working in a variety of industries where he has held the CFO & VP of Operations positions. He led Lean transformations achieving dramatic improvements in inventory turns, lead-times, customer service, income and cash flow. He has authored 3 Lean books, two of which won the prestigious Shingo Award: Who’s Counting? and Accounting for World Class Operations as well as Leading Lean. He was the Maryland Lean Leader of the Year in 2013. He is a founding thought leader in Lean Accounting and has been teaching and practicing Lean Accounting for three decades. Jerry was a long time board member of the Maryland World Class Consortia, is an AME Examiner, a Shingo Prize Research Examiner and a frequent speaker at conferences. Jerry currently advises companies and is a Lean CFO coach.

———

*NOTE: This workshop is run in affiliation with the Lean Leadership Week, which includes the Lean People Development Summit and Lean Accounting/Management Summit. You are not required to attend the Summit to participate in this workshop. Simply select only the workshop, and not the Summit, when registering.

Colin Rusel

Colin Rusel

Session Abstract:

At ATC people are our biggest asset. As a company we have identified root causes to gaps that exist, implemented countermeasures, set goals and established metrics to measure to track our progress. However, all of this is dependent on the people at ATC. Our success depends on flexible, effective, capable leaders and teams. And we have gaps between capabilities of leaders and teams and work expectations we need them to meet. Growing leaders and teams is therefore where our people development energy has been directed in 2017. Come learn from the failures and successes we experienced this year. Bring your questions and join a conversation around how we all get better at what we are trying to do.

Learning Objectives:

In this session you will learn …

How the ATC Lifetime Employee Roadmap (LER) is changing the way we work with people.

How lean leader development works with the Lean Management System (LMS) at ATC.

How ATC is working to equip leaders so they can create flexible efficient teams that can sustain the gains we are making.

About the Facilitator:

Colin Rusel joined Aluminum Trailer Company (ATC) in 2015 in the then newly established role of Director of People Development. Since that time, he has been observing, learning and working with leaders and teams to identify gaps and build tools and systems that leaders, teams and individuals at ATC can use to get better at what we do. His work in 2017 is focused on ATC’s need to develop highly capable lean leaders.

Colin has a bachelor’s degree from Goshen College and lives with his wife and two sons in Goshen, IN.